Scandinavian Astor Group AB: Scandinavian Astor Group expands to Finland as subsidiary Mikroponent acquires Welas Oy Ltd

Motives for the acquisition include:

• Increased production capacity and improved access to critical components.
• Strengthening of Mikroponent's supply chain and margin improvement.
• Strategic entry into a new Nordic market, with potential to grow further in Europe.

"The acquisition of Welas is a strategic step for Astor Group and a milestone in our expansion outside Sweden. Finland is also a new member of NATO and already has a strong focus on Security of Supply. This acquisition not only strengthens our production capacity and supply chain, but also our commitment to meet the growing demand in the Nordic and European defence and manufacturing industries. We look forward to welcoming Welas to our group and together creating new opportunities for innovation and growth", says Astor Group CEO Mattias Hjorth.

Welas, which has been a trusted quality supplier to Mikroponent for over 13 years, is a specialised contract manufacturer of metal components, with a focus on laser cutting and laser welding. The company operates in the same segment as Mikroponent, with thin components in thicknesses ranging from 0.01 millimetres up to around 3.00 millimetres and has strong expertise in prototype and pre-series production as well as small-scale special orders.

Welas currently has 7 employees and in 2023 the company had a turnover of approximately SEK 12 million, with an EBITDA margin of 21 per cent. Their customers consist of a broad cross-section of the Finnish manufacturing industry, with significant exports to Sweden, Germany and Switzerland. By integrating Welas as a separate subsidiary of Mikroponent, Astor Group sees a clear potential to improve margins and strengthen its Nordic foothold. Welas is acquired to 100 per cent and the closing of the acquisition is expected to take place no later than 2025-01-31.

"This acquisition secures capacity and capability for both the Swedish and Nordic defence industry, where Welas is already a key supplier. The acquisition is expected to create significant synergies through cost savings and revenue growth through resource optimisation and efficiency, while strengthening profitability through increased control over the value chain and reducing dependence on external suppliers", says Jörgen Lindqvist, CEO of Mikroponent.

Terms of the acquisition

The initial purchase price amounts to approximately SEK 15.5 million, of which EUR 1,050,000, corresponding to approximately SEK 12 million, shall be paid in cash and financed by Mikroponent's own cash and cash equivalents, and SEK 3.5 million is paid through promissory notes that the sellers of Welas have undertaken to settle against 300,000 new shares in Scandinavian Astor Group at a fixed subscription price of SEK 11.50 per share in the Offset Issue. In addition, there is a potential additional consideration of up to EUR 210,000, corresponding to approximately SEK 2.4 million, where Welas sellers receive 10 per cent of potential sales revenue from a single customer over a five-year period.

Subject to the fulfilment of the other transaction conditions upon closing of Welas, the Board of Directors will resolve to (i) assume the payment obligation for the promissory notes of SEK 3.5 million and (ii) resolve on the Offset Issue based on the authorisation granted by the Annual General Meeting held on 17 May 2024. The Company will inform the market when the Board of Directors has resolved on the Offset Issue.

The owners of Welas have entered into a lock-up period for 300,000 shares in connection with the Offset Issue.  Under the lock-up agreement, the sellers will retain 100 per cent of the shares for the first 12 months. After one year, the sellers may sell a maximum of 50 per cent of the shares, while the remaining 50 per cent may only be sold after two years. They have thus committed not to sell any of the shares received during this time.

Scandinavian Astor Group - Strength and security in all elements

For additional information please contact:

Scandinavian Astor Group CEO Mattias Hjorth

E-mail: ir@astorgroup.se

This information is information that Scandinavian Astor Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation 596/2014. The information was submitted for publication, through the agency of the contact person set out above, at the time stated by Astor Group's news distributor at the time of publication of this press release.

Please note that this is an English translation of a press release written in Swedish by Scandinavian Astor Group AB (publ), in the event of any inaccuracies, the Swedish version applies.

About Scandinavian Astor Group AB (publ)

Scandinavian Astor Group is active in the defence industry. The company is a supplier of products, services and related technical solutions in military defence and civil security as well as products for industries. The Group is divided into two business areas, Astor Industry and Astor Tech, where the product portfolios consist of, for example, electromagnetic warfare systems and military aviation equipment, as well as metal and composite components. Astor Group is a public company with shares traded under the ticker ASTOR on NGM Nordic SME. The Company has its operations in Sweden. Shark Communication AB, tel. +46 73-434 45 15, e-mail: info@sharkcom.se is the Company's Mentor. For more information about Astor Group's business, visit: www.astorgroup.se